RUSSIA – European multinational brewing giants Heineken and Carlsberg have announced plans to completely exit the Russian market following the country’s invasion of its Neighbour Ukraine.
Netherlands-headquartered Heineken in a statement said that it concluded that its ownership of the business in Russia is no longer sustainable nor viable in the current environment.
“As a result, we have decided to leave Russia,” added Heinken which owns a number of Russian beer brands including Bochkarev, Okhota and Tri Medvedya.
The company however said that it was aiming for an “orderly transfer” and would continue the business with reduced operations during a transition period to minimise the risk of nationalisation.
Heineken admitted that it would not profit from any transfer of ownership and that it expects to face costs of approximately €400 million as a result of its leaving the Russian market.
Additionally, the company says it will ensure the salaries of its 1,800 Russian employees will be paid by the end of this year.
Carlsberg Group pulls the plug in Russia
Joining Heineken in the unprecedented exit is Danish multinational brewer Carlsberg which said in a statement that it was seeking full disposal of its business in Russia.
As a result of this decision, Carlsberg said its business in Russia will no longer be included in the Group’s revenue and operating profit.
According to the Danish brewer, the business will be treated as an asset held for sale until completion of the disposal.
“The business will be reassessed at fair value, which will result in a substantial non-cash impairment charge,” the statement from Carlsberg CEO Cees ’t Hart read.
In 2021, Carlsberg’s business in Russia reported revenue and operating profit of DKK 6.5bn and DKK 682m respectively.
The company has promised to later provide further details on the accounting impact of the planned disposal and the reintroduction of earnings guidance.
Carlsberg’s exit from Russia is expected to impact about 8,400 employees that the company employs in the country.
“Until the completion of the process, we will maintain the recently announced reduced level of operations to sustain the livelihoods of these employees and their families,” Carlsberg said.
The company further noted that any profits generated during the humanitarian crisis will be donated to relief organisations.
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